As soon as the land of any country has become private property, the landlords, like all other men, love to reap where they never sowed, and demand rent event for its natural produce.
—Adam Smith
One area that cannot remain unaddressed is the area of property rights. The capitalist economy is built on the back of the right to own property and the unequal distribution of resources. The gap between those who have property and those who don’t is at the center of the inequality that divides our society. Under capitalism those who do not own property or material resources find themselves outside of the protection of the custodian of capitalism, the rule of law, and any protection that the amoral rule of law might provide to their individual rights. Pressure from government and society is heeded only when it becomes impossible to ignore and if regulation is imposed. But the more powerful the capitalist elite becomes, the more disenfranchised individuals become, and even Meltzer (2012) confirms that the actors in a capitalist system will find ways to circumvent the rules that prevent the market from doing what it wants anyway. Those who have property, it appears, are therefore able to get away with more than those who don’t.
The capitalist system promotes property rights; in the UK and the United States, through privatization people have been encouraged to buy shares in public utilities, and owning your own home has been promoted through the relaxation of mortgage-lending rules. In the UK, in the 1980s the Thatcher government unleashed the property-owning instincts of capitalism through enabling those who were in social housing the right to buy. Under the magnifying glass of Temperatism it could be argued that the Thatcher government was doing good by allowing those who were renting property to become property owners themselves. It also removed the burden of the local government housing stock from being a cost to the taxpayer to that of individual owners. We could, of course, with 20:20 vision criticize that decision in regard to the fact that the UK now suffers from a social housing shortage, the bursting of the housing bubble in the 1990s, and the toxic debts and subprime mortgage lending that led to the credit crunch.
If we consider the right to buy from a social interest rather than a self-interest perspective, the dynamics of the rightness of the policy from a Temperatist perspective shifts somewhat. The purpose of social housing was to provide a home for those in crisis, for the roofless, so the greatest good in regard to Temperatism wasn’t to increase the property ownership of those already in accommodation but to ensure the protection of those who were most in need and without accommodation. This demonstrates a subtle but significant difference that affects decision-making when it comes to the possibilities of two goods. By selling off social housing, the Thatcher government increased the wealth of those already housed, but at the cost of reducing the help available to those who were not housed at all. As a consequence, the gap between the haves and the have-nots was increased. This is borne out by statistics that shows that from the 1980s until 2003 there was an upward trend in the number of households that were counted as unintentionally homeless and a similar trend in regard to the number of people housed in temporary accommodation (Joseph Rowntree Foundation, 2012). Improvements from 2003 correspond with the introduction of the public sector Homelessness Strategy, although part of that strategy was to change the way homelessness was assessed, dramatically reducing the number who were now classed as homeless without changing the numbers in situations that would be previously have been classed as homeless. A recent report showed that homelessness in England increased by 32 percent from 2009/2010 to 2015/2016, and 64 percent of local authorities surveyed are struggling to find social tenancies for homeless people (Joseph Rowntree Foundation, 2017). In the UK the right to buy is back on the agenda, and homelessness continues to be a growing problem. The outcome of tax and benefit reform focused on extending property rights has resulted in moving the UK from being one of the most equal societies in Europe to being one with the greatest level of inequality in less than 20 years.
Since the 1980s, the ups and downs of the housing market has become a mainstay of Western domestic finances and directly impacts on the business climate. However, it was the heady pursuit of home ownership and the subprime mortgage market that directly contributed to the financial crash and credit crunch in 2008. Therefore, it could be argued that property rights directly affect the fortunes of organizations as well as the wellbeing of their employees. The very survival of Western economies was threatened because financial corporations had played a game of poker with ever more complex trades and increasing opaqueness regarding the vast quantities of toxic debt the institutions were exposed to. Not only were the legal boundaries of credit lending, especially around the subprime mortgage market, stretched beyond its limits, so too was the morality of the institutions involved in regard to both their decision to lend to those who were never in a position to repay what they were borrowing and their deliberate evasion of regulatory propriety and ultimately the legality of their operations. The resulting credit crunch directly impacted on the ability of businesses to engage in regular financing of their business operations, causing many viable businesses to hit the wall.
Furthermore, the resulting debt burden caused by the push for greater levels of property ownership has affected those at the lower end of the income scale the most. Unable to keep up with mortgage payments, many have lost their home and the security of a roof over their head. This is a painful place to be and injurious to the wellbeing of individuals in that situation. The rising levels of stress, depression, and anxiety demonstrate that home ownership, rather than being a blessing, has become a curse. However, the mixture of low interest rates and the increasing price of rental property because of the house price boom and housing shortages means that many rentals now exceed the affordability of the average worker, thus removing the basic need for secure housing. Having created a bubble and removed the safety net, the response to the housing crisis and the resulting poverty has not met with sympathy by the capitalist cultural mind-set.
Questions regarding the equality of property ownership have also begun to stretch beyond that of the traditional ideas of corporate shareholding and property. In September 2012, a story appeared claiming that Actor Brue Willis was suing Apple for the right to pass on his iTunes library to his children; although the story about Willis and his music collection turned out to be untrue, it did bring the subject of who owns digital downloads to the public’s attention. This goes beyond “what is mine, is mine” into the territory of “and what is yours is mine too.” Since 2001, consumers have been downloading digital music, paying for a music collection that could be played on their MP4 players, and enjoying the portability of their music collections wherever they go. However, like many who purchase goods online, the majority failed to read the terms and conditions of the download service. Now consumers have begun to realize that they have been buying digital music in the same way that they bought CDs and Vinyl, believing that if the downloads were legal then the collection of music and film became their property, which is an asset that is theirs to sell or pass on if they choose. However, it turns out, if you read the small print, the music or digital book download is a loan and it can’t be passed onto relatives or friends when we die. It has no value beyond our own use—digital downloads are no more than a lifetime loan from a lending library belonging to the organization we bought it from, not us. Digital music and eBooks can’t be resold in the same way that past generations resold their physical music collections or old books; there will no longer be second-hand music shops or books sellers, nor piles of unwanted media filling the shelves of charity shops. You can listen to the music as much as you like, you can read and reread the books as many times as you choose on your digital devices, but you can’t pass it on to your children or even bestow the unwanted items to charity shops. The price that consumers are paying for digital downloads is the price of a personal lifetime lending fee. For the consumer, the gadgets offered the opportunity of flexibility and meant that they could read any book in their personal library or listen to any song in their music collection wherever they were in the world. What consumers have now discovered is that they have bought into the world’s biggest library-lending scheme; their digital property is nothing more than an illusion of ownership.
In a market system where property rights are sacrosanct and part of the rule of law, it is interesting that the biggest consumer revolution of the last decade has ensured that the property rights have remained in the hands of the organizations who are selling what the consumer thought was a product, but what has turned out to be little more than a service. Furthermore, consumers can lose access to their legally purchased collections if their digital library providers decide that they have violated the terms of their account, which, if you have ever tried to read the terms and conditions, is buried in a myriad of legal contract terms that you need a legal degree to decipher and, unlike normal consumer rights, fails to provide a mechanism by which the consumer has the right of appeal or explanation. The digital media consumers download is no more tangible than a haircut they had six months ago. There is no doubt that as the realization dawns on the consumer, legal challenges and the regulatory framework regarding digital property rights will catch up and the terms and conditions will change or at least become more transparent. But when ownership becomes an illusion, the question has to be asked as to whether the market system and big business are looking to deliver freedom and democracy or more ingenious ways to retain property rights for themselves.
The Asset Rich and Asset Poor
Despite a growth in property and share ownership since the 1980s, there is still a large disparity between those who have assets and those who do not. “The poorest quarter of Britain’s population owns less than 1 per cent of the nation’s assets, while the top 3 per cent own a sixth. This equates to roughly 1.5 million people owning assets worth £1 trillion” (Hutton, 2011). Therefore, the distribution of assets in society demonstrates the inequality that capitalism generates. Inheritance and wealth taxes are a contentious issue, but one that must be tackled if Temperatism is to be successful. Those who have built up a property empire, or are asset rich, would probably feel aggrieved that the wealth that they have generated should go toward helping the disadvantaged, used in socially responsible projects, or be redistributed for the purpose of creating greater levels of equality. The American Dream is based on the theory that you can start from nothing and make it, and it is true that there are many rags-to-riches stories available for us to marvel over. But for every person who is living the dream, there are millions who haven’t made it because the circumstances of birth have not afforded him or her the opportunities that the very wealthy have the privilege of receiving. Monboit (2016) suggests that “the rich persuade themselves that they acquired their wealth through merit, ignoring the advantages—such as education, inheritance and class—that may have helped to secure it. The poor begin to blame themselves for their failures, even when they can do little to change their circumstances.” You only have to listen to President Trump declare himself a self-made man and nonchalant references to a “small” $14 million loan from his father to understand how perceptions of wealth generation differ depending on your experience of wealth.
The UK Labour Party’s fight with Oxbridge about setting a percentage of placements to those children from a lower social background was indicative of the leg-up that existing wealth affords. Whatever measures that you choose, if you come from a wealthy background, you are more likely to be wealthy, to have wealth, and to be in a position of power. Devising a mechanism for wealth or asset redistribution to ensure that proportional equity is achieved is not the same as a socialist or communist pursuit of everyone being the same, but a simple recognition that those who have, have a responsibility to contribute more than those who have not, because the very fact that you have makes it easier for you to get more. For those who are born in wealthy circumstances, it is as simple as if they have the privilege of a 13-mile head start in a marathon. Not only is it more likely that they will finish first, but for those who have to run the full marathon, finishing the race takes a lot more effort. For the poorest in the world the race is even harder.
This is even more apparent when we consider the difference between the wealthy West and third world countries.
The poor bear responsibility for too many aspects of their lives. The richer you are, the more the “right” decisions are made for you. The poor have no piped water and therefore do not benefit from the chlorine that the city government puts into the water supply. If they want clean drinking water, they have to purify it themselves. They cannot afford ready-made fortified breakfast cereals and therefore have to make sure that they and their children get enough nutrients. They have no automatic way to save, such as a retirement plan or a contribution to Social Security, so they have to make sure that they save . . . For the poor . . . their lives are already much more demanding than ours. (Banerjee and Duflo, 2011)
The capitalist mentality of “what is mine is mine” is selfish and unfair because it denies the reality of a privileged position that a headstart affords and the advantages that the wealthy have. The inequality between the wealthy and the not wealthy in regard to the opportunities available is detrimental to the ongoing success of human society, because it never allows the poor to catch up, so poverty and wealth are as a result of the failures and successes of previous generations repeated in a pattern of opportunity and luck according to an accident of birth.
Resolving Unemployment
The conferring of status through the ownership of material resources and property has a devastating effect on the human condition if those things are lost or reduced. Since we are no longer valued for who we are, but what we have, the loss of status goods reduces a person both in their own mind and in the mind of society. This belief might seem odd to begin with. Of course, we don’t judge people and think they are less of a person because they have lost their material wealth, most of us aren’t that shallow. But there is an underlying belief that those that are in poverty, whether in our own society or in third world countries, are somehow less worthy of support and less worthy of our time and effort, and are lacking in value because they lack the means to support themselves. No one would admit that they see the homeless as less than themselves, but we cross the street to avoid them and sneer in contempt at the way in which they have allowed themselves to fall from being socially acceptable. Do we value poor people less? Our actions perhaps speak loudly of the material status trap that we find ourselves in. Certainly, the lack of self-confidence that many in the West possess demonstrates that for many we lack value in ourselves. For those who have faced redundancy or unemployment, the dramatic collapse of household income can have a devastating and immediate effect. The complexity of property ownership and the suddenness of a loss of income means that immediately downsizing your life in line with your new household budget is not always possible. Especially when considered in the context that job losses tend to occur in a downturn, when jobs are harder to come by and houses are more difficult to sell, and being able to sell at a price that doesn’t leave the homeowner in a situation of negative equity is harder.
In the current UK housing market, house prices continue to spiral upward. The housing shortage, especially in the provision of smaller properties and the tightening of the mortgage market, means that affordability has become a real issue. First-time buyers are unable to get on the property ladder because of the need to have a sizeable deposit, and existing mortgage owners are seeing their mortgage costs increase when they re-mortgage, or when their mortgage deal ends, because the interest rates that banks are charging for mortgages are steadily increasing despite the Bank of England rate remaining at 0.5 percent since March 2009. For those struggling to pay their mortgage, the cost of selling a property you own, plus the impact the loss of income has on your ability to borrow, means downsizing becomes an exercise that the poor cannot afford. Property ownership, in an unemployment situation, becomes a trap that is difficult to escape. In the UK you can claim housing benefit to pay rent, but you can’t if you own your own home and need support paying your mortgage. The only protection you have is if you have bought payment protection insurance (PPI), but with the PPI scandal in the UK, most of the insurance taken out is not worth the paper it is written on.
The employment market is more uncertain than ever; the abandonment of the Keynesian policy of full employment at the beginning of the 1980s has meant that the capitalist system expects there to be unemployed in society while at the same time berating individuals who find themselves in that situation as lazy or feckless, treating them as a lower class of human being. The unemployed and those on low income become trapped in a cycle of debt, chained to a property they can no longer afford, but can’t afford to lose. For the wealthy, property ownership is an expression of the largesse of their wealth, the property portfolio a display of their success. For the majority of homeowners, though, property is their home, a roof over their head and a supposed place of security. A loss of income and unemployment is more than a threat to their wealth; it can spell disaster for a family and have severe consequence on an individual’s wellbeing. Our reliance on property ownership and the use of material goods as an expression of security and safety belies the simplicity that capitalism places upon material and consumer goods as status symbols.
Owning property, material goods, and resources isn’t anti-Temperatist, but for those with property and resources comes social responsibility. The shift to an ownership society has meant that large swathes of the poor now have a personal debt burden that prevents them from living well and enjoying basic goods and they are just about managing to keep a roof over the head and food on the table. The continuing upward pressure on house prices has meant that the affordability of housing in the UK and in many cities across the globe is beyond the reach of most first-time buyers and adds a significant financial burden to those who are in danger of defaulting on their mortgage or rent, as well as leading to higher living costs. We cannot live in a society where property ownership is increased, while at the same time increasing the debt burden of large sections of the poorest in society and contributing negatively to the plight of those who are homeless.
It is probably fair to say that central planning isn’t the answer either. Temperatism isn’t another word for socialism. Social housing is a good thing, but the waste that occurs in government social housing planning is no better for the achievement of a program of doing good for society than allowing property ownership to be a source of inequality and instability. The most qualified people to plan and develop social housing are those who plan and develop housing in the commercial market place. Why? The focus and the skill of the private sector is efficiency, doing things right. The focus of the public sector is doing the right things. Combine the two placing the onus on the private sector to pursue doing good, then societal effectiveness can be achieved efficiently. The UK government has gone some way toward addressing the property gap by insisting that planning permission is coupled with the private sector construction plans being inclusive of public buildings such as schools and health centers and also “affordable” housing. But more should be done. One social problem caused by social housing is that it has created ghettos of unemployed and trouble-ridden estates that have become no-go zones even for the police and the geographical separation of the wealthy from the poor. Malcolm Gladwell, in his book The Tipping Point, examines New York City in the 1990s, and the steep drop in the citywide crime rate after the introduction of zero tolerance by the New York authorities, including efforts to combat minor crimes occurring on the subway. As Gladwell says, “Epidemics are sensitive to the conditions and circumstances of the times and places in which they occur” (Gladwell, 2000). Currently, the pursuit of profit drives human behavior in the market place. Changing the context from that of capitalism’s self-interest to Temperatism’s doing good sensitizes the market to doing good and strongly influences the environment that we inhabit, enabling humanity to reassert its social power.
Something has got to change. Once again self-interest has to be replaced with social interest; making profit replaced with doing good. Schemes that think outside the normal paradigms are needed. For example, what if those who were struggling with homelessness were given the support not only to have somewhere to live, but to build their employability at the same time? Impossible? Once again, the challenge is to be inventive and innovative, to focus on doing good. What if those who are suffering from homelessness became involved as apprentices for organizations who have new building projects? It might be that construction companies who are building housing projects take on apprentice plumbers, electricians, plasterers, roofers, joiners, administration assistants, project managers, HR assistants, etc. What if besides getting somewhere to live, the homeless are supported with counseling and financial support systems and the ability to train or learn new skills that will not only help them put a roof over their heads, but give them a future too? Many capitalists will be thinking about the “costs” of such a project without appreciating the holistic approach that saves costs in the long run. For the individuals involved they may well be involved in building the very homes that they end up living in.
There will, of course, be those people who are unable to work, due to ill health, but again housing schemes can be developed alongside appropriate health and wellbeing support. Unemployment must not be equated with fecklessness or individuals being too lazy to work. Unemployment must be seen within the context of the whole society, rather than a problem that should be left for the individual to deal with. We cannot allow people to passively remain within the benefit system, without providing support to help them be all they are meant to be. Many job creation schemes have been attempted in the past, with limited success, partly because the system has relied on the public sector to devise it, a sector that is not used to job creation or wealth creation. A system that is designed from the basis of budgetary constraints will always struggle to add value and provide the necessary tools and parameters to ensure employment for those who have none and will struggle to be efficient. Private organizations offer the necessary foundation, upon which a commitment to ensuring that there is work for all, as far as possible, can be established as a goal for society. The unemployment support system should have a dual role of being a safety net for those who need it and providing the mechanism for proactive support of individuals in developing their talents, using their skills and employing their knowledge. The public sector can provide a layer of support in regard to giving the unemployed public works to do, for higher levels of benefit, alongside training and development opportunities. The aim should always be that someone who is unemployed becomes more able to actively manage their careers and increase their employability as a result of being out of work rather than less so.
Many may criticize ideas such as these as “unrealistic” or “idealistic,” but the retort to the cynics has to be the challenge of “why not?” We must as a society begin to think big and realize that we, the human race, are capable of a lot more than we are being given credit for or achieving right now. Capitalism has robbed us not only of our morality, but also of the potential of social power to find a way to make things happen for something other than profit. Power has retreated from the coming together of many in a social movement focused on doing good, which has the ability to unlock the potential of many, to a monetized version of power based on the value that the market places on capital and labor. The market process and capital property disempower the social and political power realms by placing a technical value upon them that represents their worth in an exchange process. As markets have shifted toward financialization, the value of all that is good in society and politics, in that which is meaningful, has diminished in favor of money, profit from capital and capitalist property. The longer we leave the system unchallenged, the harder it will be to uncouple innovation and the ability to make good things happen from monetization and profit agendas.